May 1, 1997

Clinton and Gingrich View Hong Kong as Test for China

By STEVEN ERLANGER

ASHINGTON -- President Clinton pronounced himself "quite
satisfied" with the assurances on the future of Hong Kong he
received Wednesday from Chinese Foreign Minister Qian Qichen, but
said he was waiting to see if China's words matched its actions.

House Speaker Newt Gingrich warned Wednesday that China's
favorable trading status depends upon how Beijing handles the
British colony's transition to Chinese rule.

Clinton administration officials have said repeatedly that they
regard the way China handles its reassertion of sovereignty over
Hong Kong on July 1 as an "important benchmark" for the larger
U.S.-China relationship.

But for a widening coalition in Congress, in an atmosphere where
China is viewed as a rising rival to American power, the transition
is seen as a litmus test for the entire relationship with Beijing
and a way to hold Clinton's feet to the fire.

Qian spent the last three days in Washington meeting
administration officials and congressional leaders with two
purposes, American and Chinese officials said: to prepare for the
state visit this autumn of Chinese President Jiang Zemin, and to
reassure the Americans about Beijing's commitment to preserve the
autonomy and free market of Hong Kong.

Qian met Clinton for 40 minutes Wednesday, discussing issues
ranging from Hong Kong to China's growing trade deficit with the
United States, now approaching $40 billion by some accounts. White
House officials said that Clinton made an "especially strong
presentation" to Qian on "the need to redress and reduce any
barriers to freer trade."

Better market access is the American requirement for China to
join the World Trade Organization, and Clinton told Qian that
"were the Chinese in a position to make a bold proposal, we'd be
in a position to make a bold response," a White House official
said. He said the United States still hoped that agreement could be
reached with China this year on the terms of its membership in the
organization.

On Tuesday, Qian said that under China's rule "the democracy,
freedoms and human rights enjoyed by the Hong Kong people will be
more extensive" than under British colonial rule, which introduced
more freedoms only in the last few years. He promised that Hong
Kong would have autonomy "unmatched in the world" and would be
governed solely by local officials approved by Beijing.

Asked about Qian's assurances Wednesday, Clinton said: "We had
a good discussion about Hong Kong, and he assured me that China
intended to observe the terms of the agreement of 1984 that they
made with Great Britain and that the United States supported back
then. I was quite satisfied with what he said. And I certainly hope
that it will reflect Chinese policy."

Gingrich, in a speech Wednesday, was able to be more direct,
given his position as speaker of a Republican-dominated House and
his own recent trip to China and Hong Kong.

If Beijing did not live up to its commitments to preserve
democracy, human rights and a market economy in Hong Kong, he said,
"there would be serious long-term damage to our relations" and
China's relations with the rest of the world. On the other hand, he
said, "if Beijing handles the transition well, it will
substantially brighten its future relations with the United
States."

Speaking at the Paul H. Nitze School of Advanced International
Studies at Johns Hopkins University in Baltimore, Gingrich said
explicitly that he supports legislation to renew China's
most-favored-nation trading status for only three to six months.
That would allow Congress to monitor the transition in Hong Kong
and debate renewal again in September or December.

Under current legislation, the president must certify annually
that China deserves to retain its low-tariff trading status with
the United States. Congress then has 60 days to pass a law
overturning his certification and then to override his veto, should
that be necessary.

Despite the furor over China, if all goes well with Hong Kong
administration officials do not believe Clinton will need to veto
this year. Clinton's spokesman, Mike McCurry, indicated skepticism
Wednesday that Gingrich's proposal to shorten the renewal would
pass. Asked to comment, he said: "We'll just see if it goes
anywhere."

Qian has publicly denied allegations, attributed to unnamed
officials at the FBI, that officials at the Chinese Embassy in
Washington talked among themselves about giving money illegally to
influence the American election campaign.

McCurry confirmed that FBI Director Louis Freeh briefed
Clinton's national security adviser, Samuel Berger, about the
bureau's inquiry on Monday, after the White House discovered that
the bureau had first briefed legislators.